Nuveen Industrial Fund Raises $660M

The company has announced the first close of its U.S. Cities Industrial Fund, after participating in the purchase of a 100-building portfolio from Blackstone last year.
4024 Rock Quarry Road, Dallas. Image courtesy of Nuveen

Nuveen Real Estate has raised $660 million to launch its U.S. Cities Industrial Fund, an open-end core CRE investment vehicle that acquires and manages institutional-quality industrial properties in select cities across the U.S. The first close reflects capital raised from institutional investors in North America, Europe and Asia-Pacific, including a $150 million commitment from Nuveen’s parent, TIAA.

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In a prepared statement, the fund’s portfolio manager, Nuveen Managing Director Brian Tilton described the fund as giving investors “broad-based logistics exposure while strategically concentrating investments in buildings that are closest to consumers and in markets with strong fundamental growth opportunities, together capitalizing on secular demand trends driven by e-commerce and urbanization.

In October, the fund acquired from Blackstone a $1.3 billion seed portfolio of 45 well-leased, Class A buildings totaling about 11.4 million square feet and located in 12 strategic U.S. logistics markets. That deal was a portion of an even larger deal Nuveen Real Estate inked with Blackstone: The latter’s sale of an approximately $3 billion industrial portfolio of 100 properties totaling almost 29 million square feet.

A Nuveen spokesperson told Commercial Property Executive that the company has not set a specific target amount for a final close on this fund.

Seeking resilient markets

The U.S. Cities Industrial Fund is part of Nuveen Real Estate’s Global Resilient Series of open-end, core investment funds that are intended to capitalize on long-term, structural real estate themes and demographic mega-trends by investing in approximately 35 resilient, “future-proofed” U.S. cities to achieve diversification, income and long-term capital growth. Nuveen Real Estate’s U.S. industrial holdings now total about $13.2 billion across both equity and debt investments, with exposure to 247.2 million square feet in the U.S.

The U.S. industrial real estate market finished 2019 on a positive note, with vacancy steady or declining and asking rents having risen for 29 consecutive quarters, according to a new report from JLL. And although the construction pipeline is sturdy, leasing activity continues to outpace new deliveries.